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Cortez Masto and six other senators seek hearing on banking bill for pot industry

Humberto Sanchez
Humberto Sanchez
CongressMarijuana
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A bipartisan group of seven senators, including Catherine Cortez Masto, on Wednesday wrote to the leaders of the Senate Banking, Housing and Urban Affairs Committee, urging them to hold a hearing on a bill that would allow banks to work with state-licensed marijuana businesses.

“A hearing would give members the opportunity to hear from witnesses who have direct experience with the challenges facing the financial sector, the cannabis industry, and law enforcement,” according to the letter, which was addressed to Banking Committee Chairman Mike Crapo, a Republican from Idaho, and ranking member Sherrod Brown, a Democrat from Ohio.

As a member of the banking panel, Cortez Masto helped spearhead the letter. The group included Republicans Cory Gardner, of Colorado, and Lisa Murkowski, of Alaska. The group also included Democrats Patty Murray, of Washington who is assistant Democratic leader in the Senate, Jeff Merkley, of Oregon, Michael Bennet, of Colorado and Brian Schatz, of Hawaii, who also sits on the banking panel.

The letter comes after experts at an event on the marijuana issue organized by The Nevada Independent said that if there’s a federal crackdown on marijuana, it’ll probably start with cases where pot is seeping from states where it’s legal to where it’s illegal, or over banking issues, as opposed to a direct broadside on legal dispensaries.

The letter also comes after Cortez Masto told The Indy that she met with U.S. Attorney Dayle Elieson last month and made the case that she should refrain from cracking down on recreational marijuana use after the Justice Department reversed its policy giving states protections from federal prosecution.

Currently, 29 states and the District of Columbia have passed laws to allow the use and sale medical or recreational marijuana. But banks and financial institutions have been reluctant to work with marijuana businesses because of the threat of federal prosecution. Under federal law marijuana is classified among the most dangerous drugs.

Banks that work with marijuana businesses “are forced to operate in an uncertain legal environment,” the letter said. “Additionally, cannabis and cannabis-related businesses, such as landlords and security companies, have a limited access to or are locked out of the banking system, including accessing a checking account, meeting payroll and paying tax revenue, among other financial services.”

Without access to banks, many of these businesses are forced to conduct transactions in cash “raising concerns regarding public safety, money laundering and other potential crimes,” the letter said.

The group of senators helped introduce the bill in May. It would prevent federal banking regulators from prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business.

The legislation, known as the Secure and Fair Enforcement (SAFE) Banking Act of 2017, would also create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services.

“Allowing lawful cannabis-related businesses access to the mainstream banking system will alleviate security concerns and create more regulatory certainty for Nevada dispensaries and related providers, as well as the banking system,” Cortez Masto said at the time. “This bill will give our economy a boost by letting local businesses thrive and will also aid in the economic development of Nevada tribes.”

Nevada legalized recreational marijuana in 2016 and now has a growing industry. As of September, the Department of Taxation had issued 250 licenses, including for 53 retail stores, 92 cultivation facilities, 65 product manufacturing facilities, 9 testing labs and 31 distributors. Most of those — 203 — are located in Clark County with the remaining distributed in Carson City and Nye and Washoe counties.

Legal sales  began on July 1 and have generated nearly $36 million in tax revenue through January, including $5.5 million in January and $5.7 million in December.

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